India's Real Estate PE Investments Fall 31 Per Cent
Real Estate

India's Real Estate PE Investments Fall 31 Per Cent

Private equity (PE) investments in India’s real estate sector declined 31 per cent year-on-year to $1.66 bn during the first nine months of 2026, according to a report by real estate consultancy Knight Frank. The decline was driven by a sharp fall in foreign investment amid higher return thresholds in overseas markets and the rupee’s depreciation.

Overall inflows fell from $2.41 bn in January-September 2025 to $1.66 bn in the corresponding period this year, the lowest level in six years. Foreign investment dropped to $243 mn from $1.81 bn, reducing its share of total PE inflows to 15 per cent from 75 per cent a year earlier, and marking its lowest level since 2012.

Knight Frank said foreign investors were directing more capital towards developed real estate markets in the United States and Europe, as well as select Asian economies, where they saw better return opportunities. The narrowing gap between Indian and US bond yields also made investors more selective, particularly towards under-construction projects.

Domestic investors more than offset the decline in overseas capital, contributing $1.42 bn during the period compared with $603 mn a year earlier. Their share of total investment rose to 85 per cent from 25 per cent, reflecting a shift away from the historical dominance of foreign capital and greater focus on the size, structure and risk of individual commitments.

The number of transactions increased to 31 from 24, but the average disclosed deal size fell 47 per cent to $53 mn because large-ticket transactions were absent. Investments in the office segment stood at $1.18 bn, down 19 per cent, while completed assets accounted for 78 per cent of total inflows, up from 49 per cent in the first nine months of 2025. Knight Frank said a recovery in foreign investment would depend on greater stability in global interest rate expectations and clearer returns after borrowing costs and currency movements are considered.

Private equity (PE) investments in India’s real estate sector declined 31 per cent year-on-year to $1.66 bn during the first nine months of 2026, according to a report by real estate consultancy Knight Frank. The decline was driven by a sharp fall in foreign investment amid higher return thresholds in overseas markets and the rupee’s depreciation. Overall inflows fell from $2.41 bn in January-September 2025 to $1.66 bn in the corresponding period this year, the lowest level in six years. Foreign investment dropped to $243 mn from $1.81 bn, reducing its share of total PE inflows to 15 per cent from 75 per cent a year earlier, and marking its lowest level since 2012. Knight Frank said foreign investors were directing more capital towards developed real estate markets in the United States and Europe, as well as select Asian economies, where they saw better return opportunities. The narrowing gap between Indian and US bond yields also made investors more selective, particularly towards under-construction projects. Domestic investors more than offset the decline in overseas capital, contributing $1.42 bn during the period compared with $603 mn a year earlier. Their share of total investment rose to 85 per cent from 25 per cent, reflecting a shift away from the historical dominance of foreign capital and greater focus on the size, structure and risk of individual commitments. The number of transactions increased to 31 from 24, but the average disclosed deal size fell 47 per cent to $53 mn because large-ticket transactions were absent. Investments in the office segment stood at $1.18 bn, down 19 per cent, while completed assets accounted for 78 per cent of total inflows, up from 49 per cent in the first nine months of 2025. Knight Frank said a recovery in foreign investment would depend on greater stability in global interest rate expectations and clearer returns after borrowing costs and currency movements are considered.

Related Stories

Gold Stories

Next Story
Infrastructure Transport

New National Highway Between Assam and Arunachal Pradesh Notified

A new national highway connecting Assam and Arunachal Pradesh has been notified by the Union Ministry of Road Transport and Highways, bringing renewed attention to the poor condition of a key route in the region. The notification has raised hopes that long-awaited repairs will be undertaken on the deteriorating Likabali-Garu stretch. The newly designated National Highway 515A begins at its junction with NH-515 near Akajan in Assam. From there, it passes through Likabali, Siji, Garu, Dali and Basar before ending at its junction with NH-13 near Bam, also known as Bame, in Arunachal Pradesh. The ..

Next Story
Infrastructure Transport

NHAI Removes 55 Unauthorised Structures Along Two National Highways

The National Highways Authority of India (NHAI) has completed a special anti-encroachment drive along National Highway-44 (NH-44) and National Highway-444A (NH-444A). The operation was conducted by NHAI’s Project Implementation Unit (PIU) in Ambala under the authority’s Regional Office (RO) in Chandigarh. During the drive, officials removed 55 unauthorised temporary structures located on NHAI land and within the Right of Way (ROW) of the two National Highways. The structures were identified as encroachments affecting land and road corridors under the authority’s jurisdiction. The operati..

Next Story
Infrastructure Transport

Ahmedabad–Mehsana Road to Become Eight-Lane Highway

The Gujarat government is planning to upgrade the Ahmedabad–Mehsana Road by widening the existing four-lane corridor into an eight-lane highway at an estimated cost of Rs. 26 bn. The project is intended to improve road capacity and connectivity between Ahmedabad and Mehsana in North Gujarat. The work will involve strengthening and expanding State Highway-41, which serves as an important transport link between Ahmedabad and Mehsana. The proposed improvement will cover the existing carriageway and associated road infrastructure to support smoother movement of passenger and commercial vehicles...

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code